Grant Cardone: These Are the 3 Worst Things People Do With Their Money
Written by
Gabrielle Olya
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Levi Leidy
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When it comes to making the most of your paycheck, conventional advice says to put some into savings, some into investments and then spend the rest wisely — but Grant Cardone, author of “The 10X Rule” and creator of the 10X Profit Planner, doesn’t think this is necessarily the best way to make use of your money. In fact, he believes two of these common behaviors are actually major mistakes.
Here, Cardone shares the three biggest mistakes most Americans make with their paychecks.
Storing Your Cash in Savings Accounts
Cardone believes that many Americans are funneling too much of their paychecks into their savings accounts.
“The biggest mistake is people save money,” he told GOBankingRates. “This is [directed at] the frugal, conservative people — there are way more of those in America than there are overspenders.”
Cardone thinks a better use of this money is to invest it in income-producing assets, such as real estate.
“People need to start thinking more like banks and equity funds: investing their money, not saving their money,” he said. “I was with Mike Tyson yesterday. The guy with him had $10,000 on him. He’s like, ‘Grant, how much cash you got?’ I said, ‘I don’t have any cash. I’m investing.’ You can lose your 10 grand — I invest my 10 grand. And I don’t leave it at the bank.”
Overspending
On the flip side of the coin, Cardone cautions against spending too much of your paycheck — and beyond what you make.
“The second biggest mistake is people overspend,” he said. “They’re using credit cards to buy Gucci bags that they didn’t need.”
Spending more than you can afford is a surefire way to end up in a cycle of debt that you can’t break out of.
“We have the highest credit card debt in history right now and the interest rate is 24%, so if you borrow $10,000 on a credit card today, in four years, you will still owe $10,000,” Cardone said. “It is impossible to pay that balance down. The only way to get rid of it is to not use it. I don’t use a credit card if I can’t pay it off in 30 days.”
Investing In Assets That Don’t Produce Income
Cardone believes that investing in income-producing assets is always preferable to investing in assets that don’t guarantee income, such as stocks. He said that investing money in these assets through brokerage firms is another mistake many people make with their paychecks.
“We’ve been flooding money to those handful of [investment firms] for years while being told, ‘Hey, when you retire, your money is going to be there,'” Cardone said. “Well, in the meantime, for 30 years, you didn’t have access to your money.”
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